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The value chain is a systematic approach to examining the development of competitive

advantage. It was created by M. E. Porter in his book, Competitive Advantage (1980). The chain
consists of a series of activities that create and build value. They culminate in the total value
delivered by an organization. The 'margin' depicted in the diagram is the same as added value.
The organization is split into 'primary activities' and 'support activities.

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The success of McDonalds India was achieved by sourcing all its required products from within
the country. To ensure this, McDonalds developed local businesses, which can supply it highest
quality products. Today, McDonalds India works with 38 different suppliers on a long term basis
and several other stand alone restaurants for its various other requirements. McDonald͛s
distribution centres in India came in the following order: Noida and Kalamboli (Mumbai) in
1996, Bangalore in 2004, and the latest one in Kolkata (2007). McDonald's entered its first
distribution partnership agreement with Radha Krishna Foodland, a part of the Radha Krishna
Group engaged in food-related service businesses.

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McDonald's 'new 'Made for you'preparation food system will allow it to serve hotter, fresher
food.When a burger is being created the bottom bun and the meat is heated up together in the
microwave, than the cheese, ketchup, mustard and pickles are being put on and covered up
with the other half of the bun. The whole finished burger is then wrapped up into special paper
and market with the time. New cookers are being added which grill the burger meat faster.
Everything is then put in special storage cupboard, which additionally holds the food warm for
no more than 10 minutes, after that the burger is eliminated. When the customer orders
his/her food is straightaway served.

The quest for variety to satisfy the growing number of customers was attracting ultimately led
to new items being added to the Classical menu (hamburger, cheeseburger, milkshake and
coffee, soft drinks and fries). Now there is a wide range of products that have been introduced
throughout the years: Quarter Pounder (1972), Chicken McNuggets (1983), Egg McMuffin
(1973), Big Mac (1963), etc. In addition many new products are always under development in
McDonald's test Kitchens for evaluation in selected markets. The menu is often enchanted with
promotional products to add variety on limited time bases.

The group constantly examines their menus around the world in light of changing customer's
taste, as well as local customs. In addiction to traditional favourites, customers will find special
menu offerings in some countries outside the U.S. Examples include the popular Teriyaki Burger
in Japan and vegetable Nuggets in India. Also in a large Muslim populations, such as Malaysia
and many Middle East countries, their menu is Halal, prepared in keeping with Muslim
guidelines.
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The outbound logistics deals with how the final product is delivered to the customers. In the
case of Mc Donald͛s, since it works on the franchisee model, it becomes even more important
for the food to reach the customers in a proper fashion. This is why all Mc Donald͛s restaurants
are self service. What this does is it minimizes human error while delivering food to the table. In
addition the food is served piping hot and is generally served within less than 5 minutes. This
reduces the time the customers have to wait and thus often leads to customer satisfaction.
However the self service policy could lead to long lines and increase waiting time.

Customers also get a view of the kitchen and how the food is being prepared. This gives an
impression of the transparency that Mc Donald͛s offers. Mc Donald͛s employees also have to
wear uniforms and this shows uniformity in purpose.

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McDonald's is recognised as one of the best marketers of the world,investing some hundreds of
millions of dollars every year for advertising and promotion of its image.

In 1967 the franchisees created the Operators National Advertising (OPNAD). Fund by pledging
to contribute 1 % of their individual restaurants sales to a national co-operative advertising
program in addition to the 2 or 3 % they were contributing to their local advertising-co-
operatives. McDonald's has always shown bits of real life in their commercials that seems to
have became a standard for them.

Let͛s take the example of the campaign executed by Leo Burnett in 2008, the campaign uses
father-son duos from the Indian film industry to reiterate the theme of "Yesteryear's Prices". It
features Bollywood stars from past decades together with their sons and a message that prices
have not risen in line with the passage of time.
Their marketing efforts go far beyond advertising, including special food promotions, games,
videos,cassettes, tapes, videos, CDs that we couldn't get anywhere else for the value. Because
of the diversity of customers that go to McDonald's, they developed segmented marketing
programs as various key audience. McDonald's is the sponsor of such important worldwide
sporting events as the Olympics and the World Cup soccer, car racing (NASCAR), Basketball
(NBA), IPL and many more.

Currently Mc Donald͛s is focused on promoting specific products that it has come out with in
India rather than emphasizing on the price point. In addition they are also trying to develop the
drive through concept which is used by them worldwide. By doing so Mc Donald͛s is ensuring
that they can cater to customers who do not want the hassle of parking their car and enjoying a
happy meal.

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Mc Donald͛s offers free home delivery services to its customers in addition to also providing
them Drive through services. In addition in the UK and US Mc Donald͛s also offers Wi-Fi
connections.

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McDonald's places emphasis on the training and development of its employees. They aim to
provide career opportunities for people to achieve their potential. The firm offers both full and
part-time career opportunities, which helps staff to combine work with family or educational
commitments.

Job progression is used to encourage employees who got their first job in the company to
progress to management positions. These promotions are based on the performance of the
staff member. Over 40% of McDonald's managers started as hourly-paid staff members in the
restaurants. Over half of the company's middle and senior managers have moved up from
restaurant-based positions.

McDonald's policy has the following aims:

2? High recruitment standards

2? Local sourcing of staff where possible
2? The skills, talents and performance of staff matter; gender, marital status, disability,
race, colour, nationality or ethnic origin do not matter
2? Providing a safe and secure working environment
2? Staff should have opportunities for training and development
2? Jobs with the company should include career opportunities
2? There should be challenges and rewards
2? Staff pay should reflect performance
2? There should be good communication with staff
2? The education of staff matters

The company introduced the post of Diversity Development Manager in 1997. The overall
percentage of women in restaurant management is 37%. Women represent 24% of the
company's middle to senior management. There is one female UK director.

The company's hourly paid staff enjoys the following benefits:

2? Free Meal Allowance

2? Paid Holidays (4 weeks per annum)
2? Free Life Assurance (value dependent upon service)
2? Private Health Care (for employees aged 19+ with 3 years service)
2? Sponsorship Programme
2? Stock Purchase Scheme
2? Employee Discount Card
2? Service Awards (at 3, 5, 10, 15, 20 and 25 years service)
 2? Stakeholder Pension

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To be the best & leading fast food providers around the globe

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To be the world's best quick service restaurant experience͙͙ Being the best means providing
outstanding quality, service, cleanliness, and value, so that we make every customer in every
restaurant smile."

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Our values summarized in ͞Q.S.C & V͟. Provide good quality, services to customer . Have
cleanliness environment when customer enjoys their meal .The value of food product makes
every customer is smiling.
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Mc Donald͛s has kept the wheels of innovation turning with tests involving touch-screen self-
ordering kiosks for customers, customer order centers and mobile POS devices. There's no
question that the use of technology is of great importance to McDonald's.

In 2001 McDonald's began standardizing its technology by integrating its existing point-of-sale
and back-office systems in more than 11,000 restaurants in the United States. The company
now is investing in a common POS system for use around the world. NewPOS, a product
developed by Savista, will help McDonald's improve restaurant productivity and enhance the
customer experience. In addition, moving to NewPOS will create a common platform across the
globe--a move that will better allow McDonald's to leverage future technology in the
restaurants.

McDonald's emphasis on standardization has given the chain the ability to roll out new
technology worldwide.

McDonald's has selected Wayport as its preferred provider for high-speed connectivity because
it offered a business model that allowed the chain to install an enterprise-level, high-speed
network solution, partially funded by its Wi-Fi Hotspot business model. McDonald's has
leveraged the power of its Wayport solution by using it to provide free wireless Internet access
to employees and franchisees, while customers can purchase the convenient service at the
restaurant or via Wayport's partners. Such access is now available in more than 3,000
McDonald's restaurants.

Pilot tests of self-service ordering kiosks are underway in the Denver and Chicago markets. At
this point, the kiosks accept only cashless payments as a way to keep the machines easy and
quick to operate. McDonald's continues to experiment with placement of the kiosks, such as
the lobby vs. the front counter, to determine where they are most efficient. The configuration
of the kiosk counters is being scrutinized closely as well to see if customers prefer a rounded
counter with open space for serving food, vs. a traditional rectangular counter.

McDonald's is looking at mobile POS tools that can reduce customer lines and allow patrons
with young children to remain in play areas while purchasing food. One implementation
involves the crew taking orders in line using hand-held devices that are connected to wireless
printers. Then the customers present the order receipts at the counter when paying for and
picking up orders, which have been transmitted wirelessly to the kitchen ahead of time via the
hand-held devices.

In a slightly different vein, e-Learning--an interactive, computer-based program taught in

English and Spanish--has been introduced as an orientation tool for new hires and a refresher
course for seasoned employees. The program's structure is such that employees can receive
training inside McDonald's restaurants, proceeding at their own pace. All e-Learning content
focuses on individual restaurant stations, thereby giving employees a basis for better
performance.

4.? Procurement

As the above diagram depicts Mc Donald͛s sources most of its raw materials in India from local
suppliers and they ensure that the raw materials are put through rigorous quality tests. The
range of suppliers is very diverse ranging from dairy farmers to bakeries. In fact Mc Donald͛s is
one company that invests a lot in ensuring smooth supply to its stores and it does this by
providing good margins and earning supplier trust and loyalty.